With Dix closing imminent, NC still negotiating for care of mentally ill

As the state’s Department of Health and Human Services seeks permission to move the last 30 patients away from Dix, it is in negotiations with Florida-based GEO Care to create a privately-run forensic mental hospital.

"I will confirm that GEO Care is in continuing negotiations,” said Franklin Freeman, a lawyer and lobbyist who works for the company in North Carolina. He said that because negotiations were ongoing, he could not speak about specific details of what might be considered.

Officials with the Department of Health and Human Services also confirmed that conversations with GEO Care are ongoing.

“We’re not at the point of making a final decision,” said Julie Henry, a spokeswoman for the department. “We really are trying to determine if what they have to offer is what the state needs.”

* Al Delia, Acting Secretary of the N.C. Department of Health and Human Services, said Tuesday morning that negotiations with GEO Care would likely conclude one way or the other this summer. Like Henry, he said the state was still trying to decide whether privatization made sense. 

"For me, the jury is still out," Delia said. 

In the past, advocates for the mentally ill have questioned whether privatization would mean a lower standard of care. GEO Care and its parent company, GEO Group, have faced lawsuits in other states for their handling of privately-run mental hospitals and prisons.

Dorothea Dix Hospital admitted its first patients in 1856 and many of the buildings on the Dix campus were built in the early part of the 20th century.

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The Council of State, a group of ten statewide officials that includes the governor, gave the first of two final approvals during a meeting Tuesday morning. The General Assembly now has the final say as to whether the transfer can go forward.

Even if that happens, the state may later move approximately 90 of its forensic psychiatric patients – mentally ill people who have been sent into treatment following some sort of court hearing – from Central Regional to a privately run facility at some point in the future.

That’s because in the state budget that it passed in June of 2011, the General Assembly directed the department to solicit proposals from private companies to provide “the consolidation of forensic hospital care.” The specific legislative language gives the department permission to proceed only if it finds there will be cost savings compared to keeping forensic patients under state-run care.

The department issued that request for proposals in July of 2011. Although three companies initially showed interest in the project, only GEO Care submitted a bid for the project. It proposed moving 90 forensic psychiatric patients to a facility it planned to open in High Point.

Last month, DHHS decided to reject all bids associated with the contract and GEO Care announced it would abandon its plans for a High Point hospital.

However, a March 9 memo among purchasing and contract officials shows that the state planned to continue negotiating with GEO Care for the same project as was specified in the July 2011 request for proposals.

Officials with GEO Care’s home office in Boca Raton, Fla., did not return phone calls Monday. But Freeman characterized the company’s discussions with the state as “negotiations” and confirmed it was for the same project as was described in the RFP.

Henry said the "cancel and negotiation" process allowed the department to gather more detailed information than the formal bid process.

“This process allows us to continue to ask questions of them,” Henry said. She could not say why the negotiations had continued or what parts of GEO Care’s proposal were the most promising.

Delia said he was most intrigued by the potential to save money while providing the same level of care for forensic patients, who have been ordered into treatment by the courts. He said one of the biggest questions on his mind is whether the cost savings would be big enough to compensate for the problems and risks that could be encountered with privatization. 

He said that GEO Care find savings by structuring their buildings to more efficiently handle the patient population. Asked if North Carolina couldn't simply copy that model of construction, Delia said that was "one possibility" but added the state didn't have money to undertake a lot of new construction at the moment.

Delia said that in the next two months he planned to visit GEO Care sites in Florida and Texas to learn more about them. 

It’s unclear when a privately-run forensic mental hospital might be ready to handle the state’s patients. A November 2011 memo from J. Luckey Welsh Jr., who heads the division responsible for state-operated health care facilities, said it would take at least two years if administrators decide to make such a move.

“We’re not even at that place yet,” Henry said. “Right now, our biggest priority is moving the remaining patients from Dorothea Dix to Central Regional.”

Delia said that the decision on whether or not to privatize forensic mental health service would be made over the summer. 

Ardis Watkins, Legislative Affairs Director with SEANC, the state employees union, questioned whether it was appropriate for mentally ill people to be turned over to a private company.

“Our most vulnerable populations should be the last ones up for sale to the lowest bidder,” she said.

Watkins pointed to legal problems that GEO Care encountered in other states that have used their services. And she noted problems North Carolina has had when it tried to privatize other aspects of the mental health system. That said, a 2011 review found mistreatment of prisoners with mental problems at Central Prison in Raleigh, which is run by state employees. 

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* This story was updated on April 3 to add comments from Al Delia, Acting Secretary of the N.C. Department of Health and Human Services and reflect results from the Council of State meeting.